Starting a business may be simple, but the rigorous process of convincing a multitude of prospects to buy what you are selling makes entrepreneurship quite difficult.
For startups, this challenge is even more pronounced. However, if your business must succeed, it is an unavoidable road that it must tread.
This is because customer acquisition is the lifeblood of any startup. After all, you need money to sustain and grow your business, and to achieve this, customers need to patronise you.
Perhaps you’ve explored diverse ways to expand your customer base, but tangible results remain evasive.
From limited data penetration to varying consumer behaviours and economic instability, the emerging market keeps presenting unique challenges that seem to keep you from reaching your full customer potential.
Peradventure, you’re not getting the desired results because you haven’t effectively leveraged customer acquisition strategies.
The dynamic nature of the market calls for a well-optimised customer acquisition funnel.
Your business as a startup must adopt a modified approach that combines innovation, affordability, and local insights to maximise customer conversion and retention.
If you agree that you may not be doing it right just yet, then read on. This article is tailored to teach you the strategies you can use to optimise customer acquisition funnels in emerging markets while ensuring the sustainable growth of your business. But first, what exactly is a Customer Acquisition Funnel (CAF)?
DEFINING THE CUSTOMER ACQUISITION FUNNEL
Acquiring and retaining customers is not a linear process. Prospects go through certain stages before deciding to patronise your business.
These stages are represented by a funnel, depicting the narrow proportion of the prospects that eventually get converted.
A customer acquisition funnel is, therefore, the representation of those several stages that prospects journey through to become loyal customers.
The typical stages consist of:
S/N
STAGE
DESCRIPTION
KEY METRICS
1. Awareness
Attracting potential customers through marketing efforts
Website traffic, ad impressions
2. Interest
Capturing leads and engaging potential customers
Email open rates, engagement
3. Consideration
Nurturing leads with personalised content or offers.
Click-through rates, trial sign-ups
4. Conversion
Turning leads into paying customers. Conversion rates, sales volume
5. Retention
Encouraging repeat purchases and loyalty.
Customer lifetime value (CLV)
Many B2B website conversion rates average only about 2%, missing out on the whopping 98% of customers who already visit their websites. This emphasises the need to optimise each stage of this funnel. To do this in an emerging market, there is a need to address local challenges while leveraging market-specific opportunities.
So, how do you optimise CAF for desired results?
KEY STRATEGIES FOR OPTIMISATION
To improve the effectiveness of your customer acquisition funnel and attain the goal of attracting and retaining a large number of customers for your startup business, consider leveraging the following strategies:
Localised Marketing Strategies: Emerging markets commonly have unique cultures, terminologies, and economic differences. As such, tailoring your advertising efforts to include those local languages that make your business feel native to your target audiences will help you build a stronger connection with them. With cultural relevance and personalised interaction, localising your marketing enhances your user experience and fosters higher engagement with your brand, thereby boosting your conversion rates. For example, Coca-Cola’s ‘Share a Coke’ campaign personalised bottles with local names of prospects, which boosted their sales. Also, you can partner with influencers or community leaders and leverage popular social media platforms such as WhatsApp, Facebook, TikTok, etc., to reach a wider audience and improve your visibility.
Mobile-First Approach: According to GSMA, 4.6 billion more people accessed the web via mobile in 2023 – a 57% increase in the global population. This reflects a high global mobile phone penetration rate. The implication of this is that if your website is not mobile-friendly, you will inconvenience prospects by preventing them from accessing your brand; hence, you will lose customers. Therefore, as a startup, you need to prioritise mobile-optimised experiences for your customers. You could do this by developing lightweight mobile apps that function well on low-end devices. You could also utilise SMS and USSD-based marketing to include consumers with limited internet access. Also, ensure that websites and payment gateways are mobile-friendly, and you’ll cut down on the number of customers you lose.
Affordable and Flexible Pricing Models: Due to economic reasons, affordability has become a key factor that drives purchasing decisions. As a startup, you want to ensure that you offer competitive prices or payment plans for customers. This could be flexible payment plans like pay-as-you-go or micro-financing. You could also provide freemium models or trial periods to build trust in your customers. For example, Spotify uses this model and localised pricing strategies to match its customers’ purchasing power.
Leveraging Alternative Distribution Channels: The emerging market is dynamic, and traditional digital advertising may not be as effective in some cases. Startups can, therefore, use agent networks to reach offline consumers. Also, if you must widen your funnel of conversions and customer retention, you must explore offline-to-online (O2O) strategies. For example, QR codes that link physical stores to digital platforms are now widely used and have been proven effective.
Data-Based Decisions: Data plays an important role in customer acquisition these days. To garner a wider customer retention rate, startups can improve their funnel performance with analytics tools. You can leverage Google Analytics, Mixpanel, etc., to track your customers’ behaviour. This way, you’re better informed to tailor your services to their needs and ultimately boost the conversion rate. Another option is to use A/B test marketing campaigns to identify what works best for your brand or use AI-driven chatbots to engage and convert leads in real time.
Convenient Checkout Processes: Payment friction is a major barrier to conversions. So, to land more sales and returning customers as a startup, you need to improve this by offering multiple payment options like mobile money, cash-on-delivery, and digital wallets. This way, customers have varied options to choose from as convenient for them. Also, make sure to simplify your checkout process and remove all charges that can discourage buyers from completing the purchase process.
In conclusion, optimising your customer acquisition funnel as a startup in an emerging market, you need to blend localisation, affordability, and digital innovation. When you tailor your approach to market-specific challenges while leveraging mobile penetration and community-based marketing, your brand will gain a competitive edge. Refine each stage of your CAF, and your businesses will not only drive higher conversions but also build long-term customer loyalty.
Anyikude, a leader in digital and growth marketing, dedicated to advancing financial inclusion through innovative solutions writes from Lagos
